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Cutting edge

22 May 2017, 08:00 | Posted by: Paul Donovan | Tags: Paul Donovan

US President Trump is to propose a budget on Tuesday which, according to media reports, focuses heavily on cuts to welfare programs. Investors need to consider whether Trump has the political authority to get such a measure passed, what the moves might mean in relative economic terms, and what the moves might mean socially.

Japan’s trade surplus was stronger than expected. Export data around the world is giving a consistent picture of reasonable economic momentum. This is at odds with the weakness of first quarter US GDP, but it is probably the US GDP data that is wrong. Of course, running a trade surplus can be dangerous in these more protectionist times.

Harker and Kashkari of the US Federal Reserve are due to speak. Their comments may be overshadowed by the release of the Fed minutes later this week, but the inclination of the Fed to tighten monetary and quantitative policy is clearly there.

The European finance ministers gather together for discussions today. This is never normally a terribly lively occasion, but there is the prospect of the UK exit to offer some interest. The UK is suggesting it really, really means it when it says it could just walk away. UK PM May gives an election interview today.